Though locum tenens providers may have a bit more work at tax time, they benefit from deductions not awarded to permanent employees. Check out our tax tips for locum tenens providers.

Here&rsquo;s What You Need to Know for Tax Time


 One advantage of the locum lifestyle is the immense freedom of working for
 yourself. With the autonomy of being an independent contractor comes the
 responsibility, and even tedium, of tax time &ndash; especially since you
 don&rsquo;t have an employer withholding taxes on your behalf. To assist in
 making your locum tenens tax preparation as organized and easy as possible,
 we&rsquo;ve assembled these locum tenens tax tips.*


<ol>
 <li>
 Hire a tax professional. Preparing your own taxes can be
 time-consuming and risky &ndash; especially considering the recent changes
 to tax law. As a physician or advanced practitioner who takes on locum
 tenens assignments, you may have a more complicated tax scenario that is
 best-handled by a trained tax pro. You will likely be required to file Form
 1040, Schedule C, Schedule SE, and other forms depending on your situation.
 If you work in different states during the year, your tax advisor can help
 you determine whether you need to file in each of the states. Your tax
 advisor can also help you optimize your tax savings and streamline your
 processes for keeping records and for paying estimated taxes.
 </li>
 <li>
 Take note of changes to the tax law. The new Tax Cuts and
 Jobs Act (TCJA) applies to any income you have earned as of January 1, 2018.
 The new law includes extensive changes that will likely affect you. You will
 certainly want to dig deeper into details about the pass-through income
 deduction, adjusted tax brackets, and changes to exemptions, so be sure to
 visit our MDA article,
 <a
 href="https://www.mdainc.com/blogs/how-locum-tenens-professionals-can-benefit-from-tax-changes"
 >How Locum Tenens Professionals Can Benefit from Tax Changes</a
 >
 to learn more.
 </li>
 <li>
 Pay attention to deductions. When you meet with your tax
 advisor, ask to go over a checklist of possible expenses and deductions.
 There may be business expenses or deductions you have not considered such as
 parking and tolls, journal subscriptions, equipment and supplies, cell phone
 and internet, license and board exam fees, or even your scrubs, stethoscope
 or lab coat! Consider any unreimbursed out-of-pocket expenses and ask your
 tax advisor whether they qualify. And don&rsquo;t forget, your health
 insurance premiums are also deductible. Research whether you could benefit
 from a high-deductible plan with a Health Savings Account &ndash; another
 smart way to save.
 </li>
 <li>
 Keep up with receipts and records. Once you&rsquo;ve
 thoroughly analyzed your work-related expenses, your tax professional can
 advise you as to which specific records and receipts you should retain. The
 process is much easier now since nearly all records and bills are handled
 electronically, but do retain paper receipts when possible (best practice is
 to photograph, scan, or copy them as receipts can quickly fade). In addition
 to gathering relevant receipts and bills, you will also need all pertinent
 tax forms &ndash; including your Form 1099-MISC.
 </li>
 <li>
 Follow up if you don&rsquo;t receive your Form 1099-MISC or other tax
 forms. Form 1099-MISC is used by companies to report nonemployee compensation
 (including payments to independent contractors). You should receive a Form
 1099-MISC from any entity that pays you $600 or more in a year. In the case
 of physicians and APs who work locum tenens, you should receive this form
 from your locum tenens staffing agency. The IRS requires companies to file
 and mail all 1099s to contractors by January 31. If you have not received
 your 1099s by shortly after that date, be sure to contact your locum tenens
 agency.
 </li>
 <li>
 Pay your quarterly estimated taxes. Because you will not
 have a company withholding taxes for you (unless you happen to be an
 employee in addition to working as an independent contractor), you will need
 to pay them yourself. The IRS has set up a system for you to pay your
 estimated taxes on a quarterly basis. Your tax professional can help you
 determine how much you should pay, and you can adjust this amount quarterly
 if needed based on your earnings. That way, you won&rsquo;t under or over
 shoot the mark at tax time. It may be helpful to set up a separate savings
 account so you can set aside money for taxes upon each payment you receive.
 </li>
 <li>
 Save for retirement. One way to shelter income, deduct
 contributions or defer taxes is to save money through retirement plans like
 the Solo 401(k), SEP-IRA, SIMPLE IRA, Traditional IRA, or Roth IRA. James M.
 Dahle, MD, FACEP, covers
 <a
 href="https://www.acepnow.com/article/how-independent-contractors-can-set-up-retirement-accounts/"
 >How Independent Contractors Can Set Up Retirement Accounts</a
 >
 in American College of Emergency Physicians ACEP Now. The article
 proves a helpful reminder of the importance of bolstering your retirement
 accounts.
 </li>
</ol>


 Though there may be additional work involved in preparing for taxes as an
 independent contractor, at Medical Doctor Associates we&rsquo;re still certain
 locum tenens is the way to go! You just can&rsquo;t beat the flexibility and
 freedom you&rsquo;ll find when you take on a rewarding locum tenens
 assignment. And with a little foresight and organization, you&rsquo;ll be well
 on your way to a stress-free tax season.



 * This communication is for informational purposes only. MDA, Inc. does not
 provide tax, legal, or accounting advice. Tax law is subject to continual
 change. Consult a financial professional for tax advice.

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